Turning Around the Assessor's Office

By Gerardo Sandoval

This white paper outlines a management approach to getting the Assessor's Office on track again. The major components of my initiative include: Staff and Personnel; Information Systems; Internal Focus (Making Operational Systems Accountable); External Focus (Assessment Appeals and Discovery Program); and a Timeline for Success.

The Assessor's Office has suffered a number of scandals in recent years, including an FBI investigation of the Doris Ward administration and accusations of nepotism of the Mabel Teng administration that led to her resignation in mid-2005. The morale of the department is in shambles. Hundreds of millions of dollars of properties are going unassessed. The department does not need a quick fix public relations campaign, via a few press conferences to outline yet further changes to the department, as the current Assessor has undertaken during the campaign season. The department needs a well thought out plan to turn it around, to boost morale, to end the backlog of more than 20,000 unassessed properties, not including new construction permits, corporate changes or assessment appeals, to bring in the revenue needed to fund critical city services. There cannot be a piecemeal solution to the devastated department.

The Board of Equalization conducted two audits of the San Francisco Assessor's office in the past three years, one in 2002 and one in mid-2005. Out of these audits, the BOE made nearly 70 recommendations to reform the office. Many of these recommendations have to do with quality control, developing a systematic assessment process, ending the backlog of assessments, and improving the process of discovering taxable possessory interests.

KPMG Consulting conducted an audit of the office in 2001. This audit found that the processes and computer functionality of the office were deficient. It made 47 recommendations for the office, covering Intra-Divisional Functions, Technical Services Functions, Real Property Functions, Personal Property Functions, and Management Information Systems Functions. Many of the recommendations were similar to the ones made the following year in the 2002 BOE audit.

The Controller of the City and County of San Francisco conducted a 2002 audit of the Assessor's Office. It found that the number of unworked new construction assessments outnumbered the number of worked assessments. The department, according to sources within the Assessor's office, have yet to address the massive backlog of unworked assessments. The Controller also conducted an audit from January 1, 2004 to April 6, 2005, investigating the uses of the petty cash fund. It found that the fund exceeded its authorized fund amount because the Assessor did not write off outstanding checks for a period of six months or more.

All of these investigations and audits point to one massive problem within the Assessor's Office: The operational systems of the office are disjointed and piecemeal at best. Communication among staff, systems and the public is abysmal.

This white paper outlines a management approach to getting the Assessor's Office on track again. The major components of my initiative include: Staff and Personnel; Information Systems; Internal Focus (Making Operational Systems Accountable); External Focus (Assessment Appeals and Discovery Program); and a Timeline for Success.

Staff and Personnel The employees in the Assessor's Office are good hard-working people overall. Unfortunately, they are trying to do their jobs in an environment that lacks leadership and doesn't have clearly defined operational systems in place. The last two Assessors, Ting and Teng, both strove to implement PR-type changes that sound great in the press, but pull resources off of one initiative and apply them to another initiative. There is a push-me, pull-you effect, whereby nobody knows which direction the department is moving in. There is no roadmap for the staff to follow. Morale is at an all-time low and shows no sign of improvement since Ting took office. The last two leaders of the department failed to communicate an overall vision for the department. Teng was buried in scandal. Ting has not taken the time to think about an overall strategy or how to develop a blueprint for success. He has held no less than three press conference to politically champion three disjointed initiatives, while the staff awaits the vision of an overall plan.

Leadership

The staff of the department clearly needs someone who can provide the vision and leadership that has been lacking in the department. The department cannot afford further change without a leader with the constitution to stand up and outline the direction he wants to lead them in.

Training

Each permanent appraiser must receive 24 hours of training a year and each advanced appraiser must receive 12 hours of training. Eight appraisers are behind by more than 40 hours of training, according to the BOE 2005 audit, which found that it's unlikely that they will catch up on their training during the 2004-05 fiscal year. The Assessor is supposed to submit a training plan to the Board of Equalization to address this problem. This plan should include a means to revolve staff through a training program such that regular operations are not impacted.

Information Systems

In the 1990s, the Assessor's Office upgraded its computer systems. Unfortunately, the system falls short of some needed features. Upgrading the system, however, doesn't have to be a can of worms nor does it require a complete overhaul, as some candidates have suggested.

Automation

There are two computer systems in the Assessor-Recorder's office now. The first is the Atpac system, which handles all recording side. The second, the EZ Access system, handles the assessor side. Information is downloaded from Atpac to EZ in order to update ownership or do a reassessment. The bulk of the computer problems in the Assessor's office have to do with how well these two systems communicate.

For example, when a transaction is recorded in the Atpac system, that transaction needs to be downloaded to the EZ Access System, where a transaction unit staffer reviews deeds and would manually log the change. Although logging an individual transaction doesn't take much time, handling hundreds and thousands of them can create a massive backlog. Right now, the Assessor's office has more than 20,000 backlogged assessments. Some 12,000 of those are older than 90 days.

The office needs to get the two systems to talk better. Essentially, it needs some straight forward automation, so that many types of records are updated automatically.

The EZ Access System is not programmed to automate certain changes in ownership or other straight-forward transactions. By hiring a programmer to automate many of these transactions, the number and type of transactions that need supervisory review will be reduced. This would be a good first step in reducing the massive backlog of unassessed properties. By automating the communication of simple transactions, such as straight sales changes, trusts and interspousal changes, the workload would be decreased by at least 60 percent.

Currently, the computer systems are designed to work with the Department of Building Inspection and the Treasurer's Office, but the systems are not programmed to automate the logging of much of the data that is received from those offices. The current Assessor has announced that he wants to invest heavily in a new system, which sounds good, but is not only not needed, but could be a hasty and unwise investment decision.

The capability of sharing all information between the DBI and the Assessor's office, including blueprints of all buildings, is already there.

The crucial step of making the transfer of information more streamlined is a small part technological and a large part operational systems, meaning how people do their jobs. B

Internal Focus and Operational Systems

Operational systems are the often overlooked component of any IT systems plan. When an organization looks for an IT solution, they are usually looking for a handy solution to all of their problems. They sometimes fail to recognize that many of their problems are operational and not IT in nature at all. The Assessor's office falls into this category. Undoubtedly, a solution to improve the overall operations of the Assessor's office includes an IT component, as I've already discussed. Just as important is the need for an operational plan for the department.

The department is so far behind in backlog assessments that it's hard for them to focus on any long-term goals. That's the meat of the problem. I've talked about making some modest upgrades to the computer systems. The other side of that is reallocating resources once the workload of assessments is decreased. Staff members who are logging thousands of straight forward transactions a week will be freed up to focus on the more complex transactions, including those cases where the value of an assessment is in question. But change does not happen overnight and people can be very resistant to change that is jammed down their throats.

As the department is going to have to undergo further change to get pointed in the right direction, it's important that the staff are included at every stage of the process. That means that as we automate the IT systems and tackle the massive backlog of assessments, we'll be working together to create some long-term goals, both for the department as a whole, but also for individual teams within the department.

Without an improvement in morale in the department and buy-in throughout the ranks on any new proposals, the Assessor's ability to turn around the office will be jeopardized.

External Focus

The first order of business is righting the ship and getting the internal operations of the Assessor's office in order. Once that plan has been set into motion, I want to turn my attention on external matters: assessment appeals, discovery program, and customer service.

Assessment Appeals

The Assessor's Office has done a poor job of taking on the legal teams of the large corporations that have pushed for assessment appeals. The recent Bank of America sale is a great example. The building owners fought to get reassessed at around $600 million. The Assessor's office said it was worth $800 million. The final reassessment value was in the $700 million range. What happened is the owners lowballed the value so much and the Assessor's office put up little fight that the owners got exactly what they wanted, an assessment well below the market value of the property. The building was then sold for $1.05 billion, almost double what the building owners claimed it was worth and well more than even what the Assessor thought it was worth.

The lesson is that the Assessor needs to better prepare for assessment appeals and then better defend their position once they are before the Board of Appeals. In the B of A case, they failed at both preparation and at challenging the building's lawyers in front of the Appeals Board. The Assessor should have had an appraisal that was much closer to the market value and then they should have laid out a well-structured case before the Appeals Board. I have trial law experience and I know how those cases should be formed and argued.

By freeing up some resources in internal operations, per my IT and operational systems plan, I hope to be able to focus more staff on fighting Assessment Appeals. Further, as a lawyer, I will personally be involved in all assessment appeals that are for properties worth more than $85 million. The Assessor needs to lead the office, not hand off the most critical cases to a junior employee.

Discovery Program

There are hundreds of buildings and taxable properties that are not being assessed or taxed. They range from very large businesses to small commercial properties. The Assessor's office needs to do a better job of identifying taxable properties. This means cross-referencing records with the city treasurer and tax collector, with the Secretary of State's office, with the Board of Equalization to discover legal entities that have failed to file appropriately with the Assessor's office. I've written a previous white paper on discovery and enforcement of these type of tax evasions, which often aren't intentional. A State Franchise Board tax investigator told me she ran across 5 or 6 restaurants next to each other, none of which were paying taxes on their properties. When she brought it to the attention of City Hall, staff members at both the Tax Collector's office and Assessor's office were not interested in making any waves. She let it go because it was not her problem. We need to find these entities that are not paying their share of taxes and bring them into line.

Aside from working with other governmental agencies to discover taxable properties, I will get to know every single block in San Francisco. I will personally visit every street in downtown and along the waterfront, identifying each and every building. I suspect that I will uncover dozens and dozens of properties that are not being properly taxed. My staff will also be encouraged to investigate instances where a property might not be on the rolls.

Customer Service and First Impressions

Anyone who has visited the Assessor's office has to be amazed at the disorganization of parts of the front office. There are open spools of microfiche scattered on the floor and tables around the microfiche machines. Some of them have been damaged, with the film hanging out of the spool. If you search the filing cabinets for a particular roll, there's a good chance it's not there. The missing rolls could be on the floor or laying around somewhere else.

There is a general help desk and several computers to help the public search assessor and recorder files. The computers are powerful search tools, but the instructions are lacking and the staff will seldom help an individual figure out how to use the systems. I believe there should be a public information training session once a month to help the public use the system better.

The general help desk does a good job of handling all sorts of requests and pointing people in the right direction. By cleaning up the disorganized microfilm rolls, supplying each public-access computer with a manual and making sure there is always a staff member available to provide the hands on help that newcomers often need in finding and understanding the records, I think the customer service will be much improved.

Timeline for Success

The problems with the Assessor's office start at the top and run throughout the department. My plan includes some tangible changes that need to be made. It also talks frequently about the intangible issues of morale, operational systems, leadership and change management.

The truth is that the department can be changed for the better, but it is going to take some time. There is no recipe for instant success. In fact, throwing together a handful of disjointed efforts is a guarantee of failure.

I will see the beginnings of change within the first 90 days, with the minor computer upgrades being made in that time and the testing done to integrate those changes.

I will also spend those first 90 days meeting with every single person on the staff to determine the priorities for the office and how we, as a team, will implement a long range vision.

I'm confident that within the first 6 months, the office will see a jump in morale, the backlog of assessments will be eliminated or well on its way, and the staff will be enthusiastically focused on making it the best Assessor's office in the State.

We will not be beaten down by the high-priced legal teams in front of the Assessment Appeals Board. We will not be ranked dead last in the state among Assessor's offices. We will not be the epitome of disorganization, which is a symptom of not caring.

We can and will serve the city and county of San Francisco with pride and commitment.